“Such sudden price changes are often due to thin liquidity and can be exacerbated by fewer active traders during quieter hours.”, — write: www.coindesk.com
(Binance)
The move did not show up on any other major BTC pairs and appeared isolated to USD1, a stablecoin launched by the Trump family-backed World Liberty Financial. The pair later normalized, with bitcoin trading back near prevailing market prices.
These sudden “wicks” are typically caused by thin liquidity – or a possible display issue – rather than a broader crash. New or less-traded stablecoin pairs often have fewer market makers quoting tight prices, meaning the order book can be shallow.
A single large market sell, a liquidation, or an automated trade routed through the pair can sweep bids quickly, forcing the price to print far below the true market level until buy orders reappear.
Such dislocations can also be triggered by temporary pricing issues tied to spread widening, faulty quotes from a market maker, or trading bots reacting to abnormal prints.
During quieter hours, the effect can be amplified because fewer participants are active to absorb the order flow and restore price parity.
While the wick may look dramatic on a chart, traders generally treat these prints as a microstructure event rather than a signal of bitcoin’s underlying direction.
Still, it highlights the risks of using thin pairs for execution, especially when stablecoins or trading routes are still building liquidity.
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Technical factors dominated as FIL maintained a tight correlation with broader crypto sentiment while establishing support above $1.27.
- FIL slipped 2% in early trading hours on Wednesday.
- Trading volume rose 7% above the weekly average on moderate activity.
- Price consolidated within a $0.09 range after testing $1.35 resistance.
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